Frequently Asked Questions for Construction Bidding

Frequently Asked Questions

Who Can Do Business with State Facilities Administration, Design and Construction Division (SFA-DCD)?

No contractor is too small to participate in the bidding on construction projects, if the work is delivered as agreed and if certain requirements set by law are met. It is just a matter of knowing how to bid on state contracts and of offering the best deal for the State.

The Department of Technology, Management & Budget, State Facilities Administration, Design and Construction Division (DTMB-DCD) is the state agency that awards contracts for various kinds of construction work at state-owned facilities. DTMB-DCD wants you to have an opportunity to participate in the bidding process and possibly be awarded a contract.

Almost all construction contracts awarded by the State are let through competitive bidding. PA 430 of 2012 amended the DTMB Act to provide that for projects funded in whole or in part with state funds, the construction contract award shall be made to the responsive and responsible best value bidder, except as provided relative to disabled veteran's preference.
How does State Facilities Administration, Design and Construction Division advertise for construction bids?

Design and Construction Division advertises using the SIGMA VSS system. See www.michigan.gov/SIGMAVSS and receive instructions on how to submit a bid.
Who can represent a bidder at a mandatory pre-bid conference?

A bidder may represent themselves at a mandatory pre-bid conference, or may designate another individual, such as a subcontractor, to represent the bidder. The State of Michigan bid documents allow the State to reject any bid where the bidder has an interest in more than one bid. An individual will only be permitted to represent one bidder at a mandatory pre-bid conference.
Can I provide a letter of credit in lieu of bid security or payment/performance bonds?

No, the law requires bonds be provided for all construction contracts greater than $50,000.00. Bid security (5%) may be in the form of money order, certified or cashier's check, or a bid bond.
Can I submit a bid (proposal) on my company's standard form?

No, all bidders must use the forms provided in the bidding documents, which are available from the professional service provider as noted in the advertisement. Bids must be submitted on unaltered forms. The bidders shall make no additional stipulations nor qualify the bid in any way.
Can I fax my bid?

No, there are no provisions at this time to receive facsimile bids.
What if a bid is received after the deadline through no fault of the bidder?

Bids must be received at State Facilities Administration, Design and Construction Division by the time and date specified, or the bid will be considered non-responsive, and returned unopened. The bidder is responsible for the delivery of the bid. If the bid is delivered to the wrong office, by any delivery method, the bidder bears the responsibility.
Do I need to be pre-qualified?

For projects handled by State Facilities Administration, generally, no. However, on large or complex projects, State Facilities Administration may pre-qualify design and/or construction contractors.
Does the contractor have to use local laborers?

Fifty percent of the persons working on construction projects and employed by the prime contractor or his/her subcontractors shall have been residents of the State of Michigan for not less than one year before beginning work. The 50 percent requirement shall be reduced to the extent that Michigan residents are not available. This requirement will not be operative or shall be reduced to the extent necessary to comply with a federal law or regulation concerning federal funds used for the project. This requirement shall not apply to employers who are signatories to collective bargaining agreements which allow for the portability of employees or an interstate.
Is there a preference for a Michigan-based business?

Public Act 237 of 1988 provides that out-of-state bidders will be treated in the same manner that Michigan bidders would be treated in their state (reciprocity). Most states have similar legislation.
Does a contractor pay state taxes on materials purchased for a state contract?

Yes. See the Michigan Department of Treasury Revenue Administrative Bulletin 1999-2.
How do I get paid?

Not more than once each month, the contractor shall submit to the architect an itemized application for payment, supported by such data substantiating the contractor's right to payment as the state may require.

The contractor shall use the DTMB-440 Payment Request Form available on the DTMB-DCD website.

The state will pay 100 percent of the amount due upon completion of each separate task or division of the contract on which the price is stated separately in the schedule of values. The architect may require for each application of payment, a consent of surety, waivers of lien from prime contractors, subcontractors and suppliers, as-built drawings, guarantees, manuals, brochures, operating instructions, or other documents, as required under the provisions of this contract for completed work.

The payment will be made within 30 days after the architect has certified to the owner that work is in place in the portion of the facility covered by the applicable request for payment in accordance with the contract documents.
When do I get my bid security back if I am not the successful bidder?

Negotiable security (cashier, or certified checks, etc.) are returned after the project has been awarded and the contract executed (approximately 6-8 weeks after the opening). Unsuccessful bidders may request, in writing, an earlier return of their security; however, this action removes the bidder from further consideration should the lower bidders decline or withdraw.

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Frequently Asked Questions for Construction Bidding

Frequently Asked Questions

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